thoughts and insights about social and environmental responsibility and sustainability reporting

Saturday, April 10, 2010

CSR Reporting in China

Yesterday I attended a Global Reporting Initiative webex presentation and discussion led by Sean Gilbert on the state of CSR and CSR reporting in China. It was quite fascinating to hear of some of the different perspectives, trends and challenges facing the development of accountability and transparency in the Chinese corporate world and I will share some of Sean's insights here.

Sean Gilbert is an experienced team member of the GRI and now serves as the China Focal Point, to assist the development of reporting processes in that country. The sheer size, impact and current state of development makes China a fascinating country full of both risk and opportunity in CSR terms. Over 200 million people in China are still living on $1.25 per day, and China is the second largest emitter of GHG gases in the world. Sean talks of an explosion of interest in CSR and Sustainability driven by the Chinese government as a policy initiative to embrace transparency via CSR and greater accessibility of public information. This is being done with policies to promote CSR in business, and in recent years the perception has changed from businesses as a platform for economic growth and job creation, to organizations which must display considerations of their role in society and the environment. This is just as much about the Chinese government leading the rewriting of the social contract of business with society as it is about displaying responsible behaviours and aligning with sustainability trends. Much of business in China is done via Chinese state-owned businesses and the Government is committed to these businesses reporting on sustainability, developing a CSR department and implementing CSR by 2012.

Sustainability reporting is developing rapidly in China, with around 700 reports produced in 2009, from around zero in 2005. The quality of Chinese reporting varies, and tends to be more qualitative than quantitative at this stage, partly because Companies do not have the systems in place to monitor and measure, and partly becaue there is a low level of comfort with a high level of detailed disclosure. Reporting tends to be more focused on the role and responsibility of the business in society rather than specific sustainability impacts.

Sean spoke of Chinese Companies using reporting not so much as an external disclusore tool and communications function , but more as a management practice which enables the development of good management processes in the business and more systematic benchmarking of performance. One of the key benefits, though , of the development of reporting is that it offers, perhaps for the first time, an opportunity to engage - reporting creates use of a common language and common framework for relating to CSR issues and the development of consistent policies. However, the transition to a participatory culture will not be easy, and long-term success will depend on building a strong local audience and increasing levels of trust at local level.

The GRI will have a functioning full-time office open within the next 6 weeks in China, and hopes to focus on improving the quality, not only the quantity of reporting through training, greater engagement with the Chinese government which is critical, and support for inclusion of ESG data alongside financial disclosures.

I didn't catch the start of Sean's talk so I dont know if he referred to the potential of reporting in China, but given the rapid pace of reporting development in that country, I was thinking of taking a course in Chinese, as many of the ones I have seen are not in English. However, there are some in my native tongue. Sean mentioned Cosco, a large Chinese shipping business, whose 196 page 2008 Sustainable Development Report , at GRI level A+, is downloadable from their website and can even be viewed in video edition. This does seem like a very comprehensive report. The Company has been reporting since 2005. The other noteworthy reporter mentioned was China Mobile Ltd, whose 2009 report can be downloaded here. It is also an impressive report, their fourth, called "Growing Together Harmoniously". The Company has over 500 million customers, and includes a feedback form built into their report, which is a nice touch, apropos encouraging engagement. I just hope they dont get 500 million completed forms back, as by the time they analyse the feedback, it will be 2025 before we see their next report. Both Companies participate in the UN Global Compact and report on their adherence to the principles.

Thanks to Sean and the GRI for a fascinating session!

elaine cohen is the CEO of Beyond Business, a leading social and environmental consulting and reporting fitm. Visit our website at www.b-yond.biz/en

1 comment:

This blog entry for me provides an interesting perspective you cannot get from mainstream use. It supports the idea of "The Story of Meaningful Use," which is the frame for my new research and writing.

Mainstream press is so focused on what is wrong and politically incorrect, we don't see to easily find a small initiative that is impacting a change at a time.

Elaine, been very behind in reading you and pleased to come here and find a good summary of those small changes, a company at a time.

Now to figure out how we can track the impact of small change for significant impact in communities, states, country and globe.